Deal value is not yet disclosed by either of the parties.
MetLife India, an affiliate of MetLife, US, was incorporated as a joint venture between MetLife International Holdings, The Jammu and Kashmir Bank, M Pallonji, Co Private Limited and other private investors.
MetLife India holds a paid-up capital of Rs 1,997 crore. Reports say MetLife will issue fresh shares to PNB which will increase the size of the company's capital to Rs 2,596 crore.
PNB had shortlisted 10 companies in March and list got contracted to three firms – Aviva Life, MetLife and Bharti Axa Life, finally it selected MetLife as its partner.
"We have considered offers made by various companies and selected Metlife as our partner," PNB Chairman and Managing Director K R Kamath told reporters here after announcing the bank's quarterly numbers.
Commenting on the deal with PNB, Metlife India MD Rajesh Relan said the partnership would help the company grow into a top-tier life insurer and more than double its market share.
PNB have a large branch network and is among the few banks that do not have a stake in a life insurance company.
PNB also agreed to enter into a 10-year distribution tie-up with Metlife India, in which Jammu and Kashmir Bank and M.Pallonji & co also hold stakes.
The deal is expected to be closed by end-2011.